I'm inclined to agree that being able to recognize and recall information is a different (and often prerequisite) skill from applying the same information. Bloom's taxonomy https://bit.ly/1KRj4ZH is the way I think about it: recall/recognition, comprehension, application, analysis, synthesis, and evaluation of the same piece of knowledge are all distinct skills. You have to teach or seek to learn each separately... its not automatic that learning one gives you the other skills. (There's been some criticism of the taxonomy. But I'm not sure I've seen a better model.)
The latter part of your question, about academic v practical education in CS programs... I'm not familiar with the research about what improves retention in academic programs. That said, the more you can align and connect to someone's values and beliefs -- what gives them purpose -- they more motivated they are to learn.